AppFolio 1099s: how they calculate, why amounts come out wrong, and how to correct them
AppFolio 1099s: how they calculate, why amounts come out wrong, and how to correct them
AppFolio generates two types of 1099s and they calculate completely differently. Getting this wrong is one of the most common year-end problems in PM accounting.
The owner 1099 is calculated as total gross income plus the net change in prepaid rent. The prepaid rent component is the one that surprises people. The IRS considers advance rent taxable in the year it's received, not the year it applies to. So if a tenant paid January rent in December, that amount shows up on the current year 1099 even though it covers next year. AppFolio factors this in automatically, but if your prepayment GL has any non-standard transactions on it, the 1099 amount will be off.
The vendor 1099 is calculated as the sum of all payments to that vendor minus any vendor receipts marked for inclusion. The $600 threshold applies. Vendors set up as corporations are generally exempt, but sole proprietors and LLCs taxed as sole proprietors are not.
Starting in 2025, AppFolio is moving away from the FIRE system to the IRIS CSV format for e-filing. Any company filing 10 or more 1099s is required to e-file. The IRIS file uses SSN formatting for individuals and EIN formatting for businesses, and the name-splitting rules are different between the two. If your payee records in AppFolio have mixed formatting, the IRIS file will generate errors.
To correct an owner 1099 after it's been generated, use a journal entry. A credit to the income GL increases the 1099 amount. A debit to the income GL decreases it. Generate a new 1099 after posting the JE.
To correct a vendor 1099, create a bill for the correction amount paired with a vendor credit that nets to zero. This adjusts the payment total AppFolio uses in the calculation without actually moving money.
Run the 1099 preview report in November before the official generation. It's the cleanest way to catch discrepancies before you're correcting live filings.
AppFolio 1099s: how they calculate, why amounts come out wrong, and how to correct them
AppFolio generates two types of 1099s and they calculate completely differently. Getting this wrong is one of the most common year-end problems in PM accounting.
The owner 1099 is calculated as total gross income plus the net change in prepaid rent. The prepaid rent component is the one that surprises people. The IRS considers advance rent taxable in the year it's received, not the year it applies to. So if a tenant paid January rent in December, that amount shows up on the current year 1099 even though it covers next year. AppFolio factors this in automatically, but if your prepayment GL has any non-standard transactions on it, the 1099 amount will be off.
The vendor 1099 is calculated as the sum of all payments to that vendor minus any vendor receipts marked for inclusion. The $600 threshold applies. Vendors set up as corporations are generally exempt, but sole proprietors and LLCs taxed as sole proprietors are not.
Starting in 2025, AppFolio is moving away from the FIRE system to the IRIS CSV format for e-filing. Any company filing 10 or more 1099s is required to e-file. The IRIS file uses SSN formatting for individuals and EIN formatting for businesses, and the name-splitting rules are different between the two. If your payee records in AppFolio have mixed formatting, the IRIS file will generate errors.
To correct an owner 1099 after it's been generated, use a journal entry. A credit to the income GL increases the 1099 amount. A debit to the income GL decreases it. Generate a new 1099 after posting the JE.
To correct a vendor 1099, create a bill for the correction amount paired with a vendor credit that nets to zero. This adjusts the payment total AppFolio uses in the calculation without actually moving money.
Run the 1099 preview report in November before the official generation. It's the cleanest way to catch discrepancies before you're correcting live filings.
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